Current events in the words of the students of Vinod Gupta School of Management, IIT Kharagpur

TRAI’s ban on Free Basics – Justified or not?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Free Basics, a campaign started by Facebook in India, aimed to provide people with access to useful services on their mobile phones in markets where internet access may be less affordable. With the increasing use of technology, the websites would be available for free without data charges and by introducing people to the benefits of the internet through these websites, it hopes to bring more people online and help improve their lives.

However The Telecom Regulatory Authority of India (TRAI) has put a permanent ban on Free Basics as a part of ruling that supports net neutrality. India’s net neutrality activists argue that the Free Basics violates net neutrality by favoring some selective services over the others. As it is a zero-rating platform, access is provided only to a limited number of services, but not to all, thereby providing access to only limited Internet content to the end user which violates the principles of net neutrality. Another reason for TRAI’s ban is the ‘Prohibition of Discrimination Tariffs for Data Services Regulation, 2016’, issued by TRAI itself which does not allow service providers to offer or charge discriminatory tariffs for data services on the basis of content being accessed by a user.

Differential pricing by Free Basics becomes a tool that facilitates market dominance. Hence, the internet giants can easily afford to participate in such programs and this will keep new players out of the competition. Again, it is not exactly an open platform as Facebook has defined the technical guidelines for Free Basics, but has reserved the right to change them.

I think Facebook aims on establishing itself as a monopoly of providing selected services at free of cost in the mask of ‘Free Basics’ and hence TRAI’s ban on Free Basics is quite justified.